When the valuation is based on investment by investors already in the deal... It does not imply that they think there’s a plausible path for the business to be worth the money.
As events have shown with WeWork, it implies that they are maintaining the façade for a little while longer while hoping o get to the point where they can unload the business onto the public markets.
Asking SoftBank what they think their investments are worth is like asking me what I think my house is worth. You Have to go by what arms-length investors are willing to pay.
I really think we need a new rule where nobody quotes a valuation if the last round involved existing investors and/or founders pumping up the valuation with additional investment.
Comments
The valuation does not come from their operating numbers, core or otherwise. It comes from their last round of funding.
I'm aware of that, but the valuation implies that at least the investors think there's a plausible path for the business to be larger than Hyatt.
When the valuation is based on investment by investors already in the deal... It does not imply that they think there’s a plausible path for the business to be worth the money.
As events have shown with WeWork, it implies that they are maintaining the façade for a little while longer while hoping o get to the point where they can unload the business onto the public markets.
Asking SoftBank what they think their investments are worth is like asking me what I think my house is worth. You Have to go by what arms-length investors are willing to pay.
I really think we need a new rule where nobody quotes a valuation if the last round involved existing investors and/or founders pumping up the valuation with additional investment.